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SUCCESS STORY: INSURANCE RETIREMENT SERVICES
CLIENT:
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Major Insurance Company |
DIVISION:
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Retirement Services |
CONTACT:
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Chief Financial Officer
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MAJOR FUNCTIONS:
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401K Operations and Processing, Customer Service, Human Resources, Sales and Marketing, Systems |
SITUATION
The business environment in which the client operates is rapidly
changing with new regulations forcing product and delivery
channel changes. New competitors regularly enter the retirement
services industry. Internet service components are experiencing
explosive growth. Upon LoBue's arrival the operating environment
included:
- Antiquated systems that impeded an efficient delivery
mechanism
- A slower rather than urgent response to adapting to new
market paradigms
- The primary distribution channel, an agency sales force, was
expensive to maintain and did not meet the day to day case
penetration, enrollment, client retention, or client information
warehousing needs of the current environment
- Customer service processes were inefficient and under-defined.
- Regulatory and competitive changes in their industry forced
case and product conversions, without the nimbleness of an
organization that has a sense of urgency to adapt to market
conditions.
- Notable absence of MIS throughout operations and sales
- New executive management team
The client was pursuing an aggressive sales strategy to double
its assets under management. They recognized that market share
was not the only component of competitive position and undertook
this project to improve their competitive position in these
specific ways:
- Reduce expense-to-asset ratio to a competitive level, which
they defined as a 20BP gap
- Establish productive, efficient, integrated work processes
- Ensure that the processes and activities have a brand and
customer driven focus
LOBUE RECOMMENDATIONS
Operations
- Required MIS output was defined and managers were trained to
fine tune capacity models
- Call center operations implemented that reduced the cost per
call by almost 60 cents. Further recommendations, being
considered will further reduce the cost by 40 cents
- The perceived high level of Not In Good Order (NIGO) case,
participant and money-in submissions from clients was addressed
through the formation of teams and IT resources to track and
reduce NIGO. The Individual Annuity unit's NIGO was also
addressed with a recommendation for a training CD and long term
automation recommendation
- Process and procedural changes in Administrative and Payout
Services
- New Operations/IT structure and systems to increase
operations efficiency
Information Technology (IT)
- Client IT organization was more expensive and more richly
staffed than peers. Meaningful reductions in all major service
areas and all organizational levels
- Routine maintenance of old systems transferred offshore
- Revised desktop/laptop policy that created purchasing power
improvements
- Opportunities to streamline or discontinue activities in
time tracking, billing, the Project Management Office and
consultant sales tax computations
- A major consolidation of redundant IT functions with the
corporate IT department
Sales
- Major opportunities were identified throughout Sales, both
in FTE savings and in other process expenses. Costs such as
licenses, leases, travel, postage, printing, etc. were addressed
- Instituting contact management systems for its various sales
channels
- Instituting sales metrics/productivity measurements
- Consolidating MIS reporting units into one integrated financial reporting group
- Within each distribution channel opportunities were found to
better define roles and handoffs for all sales associates
Process clarity was the cornerstone of many of these
recommendations
- The Producer Services area is undergoing a redesign to
accommodate some of the additional field activities
- Redundant sales desks within two separate divisions will be
consolidated into one around year-end
REAL RESULTS
Benefits came in many forms: dollar savings, FTE savings, more
efficient organizations and improved modes of operations.
Savings and improved management capabilities accompany
implementation of the recommendations. There were over 100
actionable recommendations delivered for senior management
discussion.
Total project benefits were over $19 million of savings in year
one and at least $20 million annually in years beyond.
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